Financial Management

EHM. Why has CareMedic invested in developing a solution targeted solely to secondary claims – a source of revenue that most providers rank as a lower priority and will typically write-off a good portion?
SS. The economies of scale have not been there for providers to pursue the high volume and low numbers associated with secondary claims. We foresee a time, however, when providers can no longer afford the luxury of ignoring secondary claims. Secondary insurance is most prevalent with Medicare beneficiaries. Aging baby boomers on Medicare will start entering into hospitals’ revenue streams in the next few years. At the same time Medicare reimbursements are shrinking. Those two factors will make hospitals more vulnerable to secondary payers' denial and underpayment strategies.
Hospitals have underinvested in revenue cycle solutions and are not prepared – both in budgets and staffing – to recoup secondary claims effectively. They will need to look for overarching technology and service solutions that can supplement their legacy systems and staff.

What we’re offering is a combined services and technology outsourcing solution requiring no upfront or overhead costs that can help to realize more than 90 percent of those collectable secondary dollars.

EHM. CareMedic recently began offering a dashboard gratis with its point solutions to great success. Why do you think dashboards are becoming so popular with hospital executives?
SS. Making informed decisions is imperative in healthcare, particularly given the challenges of staffing shortages, aging baby boomers, the perfect storm that’s happening in healthcare. Hospitals leaders also realize they need to scrutinize their performance like any other businesses. To do that, they must find a way to consolidate their performance information to make it actionable. Until you have the trending and data, you cannot identify where your issues lie. For example, you keep seeing the same payer over and over again denying claims, but do you know if there is one reason why or a handful? Dashboards give management the insights to identify and reduce variance in processes, monitor performance thresholds and isolate breakdowns.

EHM. What do you see as the number one way hospitals can drive costs out of their administrative functions while recouping more accounts receivable with minimal investment?
SS. Hospitals should identify their most labor intensive areas and ask themselves simply, ‘Can this be automated or outsourced?’ and if so, pursue those options. The challenges of the current paper-based payment process make it economically unviable for most hospitals to invest in more people and advanced technology all by themselves. Also some of the newer technologies out there to remove the paper, such as optical character recognition (OCR) are expensive and complicated. To try to automate and manage it in-house may be setting up the hospital to trade one set of business issues for another.

By seeking transaction-based or contingency-fee priced solutions, hospitals can pursue supplemental staffing and processes with minimal upfront costs in the technology, along with the savings from avoiding the need to train people and maintain the systems.

EHM. What is the newest trend in revenue cycle solutions?
SS. Traditionally, revenue cycle solutions have not been associated with patient care quality. I think the increase in self-pay dollars will see a greater focus on the financial aspects of the patient’s care and will bring revenue cycle solutions out of the back office and into a primary platform to handle patient satisfaction. Even today most hospital executives will cite patient billing as their number one customer relations issue.
Hospitals will need to have a patient-centric view of the individual’s billing history.

The traditional revenue cycle model, however, involves a number of disparate systems that often cannot communicate with one another. The inability to track patient movement from one system to the next creates tremendously complex and inefficient workflows that require an extensive amount of time and labor to fully put together the longitudinal picture.

Overarching technology solutions like CareMedic’s electronic Financial Record (eFR), which store information from disparate financial systems in a common data repository, can serve as a critical source for financial business intelligence at the patient level in the challenging new healthcare environment to come. These are the type of solutions that connect the “islands of information” will become increasingly popular with hospitals.

BOXOUT 1

Sheila H. Schweitzer was elected CareMedic’s Chairperson and Chief Executive Officer in September 2004, after serving as its president and chief operating officer since March 2003. Previously, Schweitzer was executive vice president and chief operating officer of MedUnite Inc. MedUnite was a consortium of seven health plans – Aetna, Cigna, Wellpoint, Anthem, Oxford, Healthnet and PacifiCare – that developed a network for connecting physicians with payers to communicate health data such as eligibility, claim status, referrals, authorizations and claim submission. MedUnite was sold to ProxyMed, Inc. in December 2002. Prior to working for MedUnite, Schweitzer was chief executive officer of Presideo, Inc., a healthcare Internet security company.